NOTE AND SECURED REVOLVING LINE OF
                  CREDIT AGREEMENT MODIFICATION AGREEMENT NO. 4



         THIS AGREEMENT, made this 18 day of October, 1995, by and between FLEET
BANK f/k/a FLEET BANK OF NEW YORK, a bank  organized and existing under the laws
of the State of New York,  and having its principal  banking house located at 69
State  Street,   Albany,   New  York  12201  (herein   called  the  "Bank")  and
ENVIRONMENT-ONE  CORPORATION, a New York corporation with its principal place of
business  at P.O.  Box 773,  2773  Balltown  Road,  Schenectady,  New York 12309
(herein called the "Borrower").


                              W I T N E S S E T H:

         WHEREAS,  the  Borrower  did execute and deliver to the Bank a Business
Purpose  Promissory  Note  (Demand  Line of  Credit)  in the face  amount of Two
Million Five  Hundred  Thousand and no/100  Dollar  ($2,500,000.00)  dated as of
October 2, 1992 (herein called the "Note"); and

         WHEREAS,  the Note is subject to the terms and  conditions of a Secured
Revolving  Line of Credit  Agreement  also  dated as of  October  2, 1992 by and
between the Bank and the Borrower (the "Line of Credit Agreement"); and

         WHEREAS, the Note and the Line of Credit Agreement were modified by the
parties  pursuant  to  the  terms  of  a  Note  and  Line  of  Credit  Agreement
Modification  Agreement  by and between the Borrower and the Bank dated the 23rd
day of March,  1994 and a Letter Agreement dated May 10, 1994  (collectively the
"Modification Agreement"); and

         WHEREAS,  the  Note  and the  Line of  Credit  Agreement  were  further
modified  by the  parties  pursuant  to the  terms of a Note and Line of  Credit
Agreement  Modification Agreement No. 2 by and between the Borrower and the Bank
dated the 20th day of March, 1995 (the "Modification Agreement No. 2"); and

         WHEREAS,  the  Note  and the  Line of  Credit  Agreement  were  further
modified  by the  parties  pursuant  to the  terms of a Note and Line of  Credit
Agreement  Modification Agreement No. 3 by and between the Borrower and the Bank
dated the 30th day of March, 1995 (the "Modification Agreement No. 3"); and

         WHEREAS,  the  Borrower and the Bank desire to further  modify  certain
terms of the Note and the Line of Credit  Agreement,  but only  pursuant  to the
terms and  conditions  of this Note and Line of  Credit  Agreement  Modification
Agreement No. 4.

         NOW, THEREFORE,  in pursuance of said agreement and in consideration of
the mutual  promises,  covenants and agreements  herein contained and other good
and  valuable  consideration,  receipt of which is  acknowledged  by the parties
hereto, the Borrower and the Bank mutually agree and covenant as follows:


<PAGE>
         1. The Note is hereby  modified,  replaced and restated in its entirety
by a Line of Credit Note in the face amount of $2,500,000.00  dated of even date
herewith  from the Borrower to the Lender (the "New Note"),  a copy of which New
Note is attached hereto as Exhibit "A" and made a part hereof. All the terms and
conditions  of the Line of  Credit  Agreement,  as  previously  modified  by the
Modification Agreement,  Modification Agreement No. 2 and Modification Agreement
No. 3, and as further  modified  hereunder,  shall  continue to apply to the New
Note.

         2.  The  last  sentence  in  paragraph  1.  (a) of the  Line of  Credit
Agreement,  as previously modified by the Modification  Agreement,  Modification
Agreement  No. 2 and  Modification  Agreement  No. 3, is hereby  modified in its
entirety to read as follows:

                  "Advances under the Note shall be limited to (i)  seventy-five
         percent  (75%)  of  the  Borrower's   "Acceptable   Domestic   Accounts
         Receivable" (as hereinafter  defined),  plus (ii) seventy-five  percent
         (75%) of the Borrower's  bonded  municipal job  retainages,  plus (iii)
         seventy-five  percent  (75%)  of  the  Borrower's  "Acceptable  Foreign
         Accounts Receivable" (as hereinafter defined) not to exceed Two Hundred
         Fifty Thousand  Dollars  ($250,000.00)  or ten percent of the Borrowing
         Base (as hereinafter defined), whichever is less."

         3.  Paragraph  1. (e) of the Line of Credit  Agreement,  as  previously
modified  by  the  Modification  Agreement,  Modification  Agreement  No.  2 and
Modification  Agreement  No. 3, is hereby  modified  in its  entirety to read as
follows:

                  "Advances  under the Note by the Bank to the Borrower shall be
         at the discretion of the Bank based upon the Aging Schedule of Accounts
         Receivable  referred to in  subparagraph  (c) and the Retainage  Report
         referred  to  in   subparagraph   (d);  except  that  the  total  loans
         outstanding at any one time made in connection with this loan shall not
         exceed (i)  seventy-five  percent (75%) of the  Borrower's  "Acceptable
         Domestic  Accounts  Receivable"  (as  hereinafter  defined),  plus (ii)
         seventy-five  percent  (75%) of the  Borrower's  bonded  municipal  job
         retainages,  plus (iii)  seventy-five  percent (75%) of the  Borrower's
         "Acceptable Foreign Accounts  Receivable" (as hereinafter  defined) not
         to exceed Two  Hundred  Fifty  Thousand  Dollars  ($250,000.00)  or ten
         percent of the Borrowing Base (as  hereinafter  defined),  whichever is
         less. Acceptable Domestic Accounts Receivable shall be defined as those
         accounts  receivable  of the Borrower  due from account  debtors with a
         billing  address  located  within the United States of America that are
         due  ninety  (90) days or less,  whichever  is less,  that are free and
         clear  of all  liens,  and are  unconditionally  owed  to the  Borrower
         without a  defense,  offset  or  counterclaim,  and which  would not be
         classified as contra accounts.  Acceptable Foreign Accounts  Receivable
         shall be defined as those accounts  receivable of the Borrower that are
         either (i) due from  account  debtors  with a billing  address  located
         outside of the  United  States of America or (ii) that are due from the
         Borrower's  subsidiaries  created  by  sales  by said  subsidiaries  to
         unrelated  third parties,  and in either case, that are due ninety (90)
         days or less,  whichever is less, that are free and clear of all liens,
         and are unconditionally owed to the Borrower without a defense,  offset
         or  counterclaim.  Borrowing  Base  is  defined  in  the  Loan  Formula
         Certificate attached to this Line of Credit Agreement as Exhibit A."
<PAGE>
         4. All the other terms and conditions of the Line of Credit  Agreement,
as previously modified pursuant to the terms of the Modification Agreement,  the
Modification  Agreement  No. 2 and the  Modification  Agreement No. 3, remain in
full force and effect,  with the  exception  of the  modifications  set forth in
paragraphs 2 and 3 above.

         5. The Borrower  hereby  warrants and  covenants to the Bank that as of
the  date  of  this  Agreement,  there  are  no  disputes,  offsets,  claims  or
counterclaims of any kind or nature whatsoever under the Note, the New Note, the
Line of Credit Agreement, the Modification Agreement, the Modification Agreement
No. 2, the  Modification  Agreement  No. 3 or any of the  documents  executed in
connection  therewith or herewith or the  obligations  represented  or evidenced
thereby or hereby.

         IN WITNESS WHEREOF, the parties hereto have executed this Note and Line
of Credit Agreement  Modification Agreement No. 4 as of the 16th day of October,
1995.

FLEET BANK                                           ENVIRONMENT-ONE CORPORATION


By: /s/ Kevin P. Harrigan                      By: /s/ Angelo Dounoucos
   ----------------------                         ------------------------------
   Kevin P. Harrigan,                             Angelo Dounoucos, President
   Vice President                                 and Chief Executive Officer



                                               By: /s/ Philip Welsh
                                                   -----------------------------
                                                   Philip Welsh, Treasurer
<PAGE>
STATE OF NEW YORK      )
                       ) ss.:
COUNTY OF Schenectady  )

         On this 18th day of October,  1995 before me personally appeared Angelo
Dounoucos,  to me known,  who being by me duly sworn, did depose and say that he
resides at 720 St.  Davids  Lane,  Schenectady,  New York 12309,  that he is the
President  and Chief  Executive  Officer  of  ENVIRONMENT-ONE  CORPORATION,  the
corporation  described in and which executed the above  instrument;  and that he
signed his name thereto by order of the Board of Directors of said corporation.

                                                              /s/ Carol J. Hicks
                                                              ------------------
                                                              Notary Public

                                                        CAROL J. HICKS          
                                               Notary Public, State of New York 
                                                         No. 5022470            
                                               Qualified in Schenectady County  
                                             Commission Expires January 10, 1996
                                             

STATE OF NEW YORK      )
                       ) ss.:
COUNTY OF Schenectady  )

         On this 18th day of October, 1995, before me personally appeared Philip
Welsh,  to me known,  who being by me duly  sworn,  did  depose  and say that he
resides at 13 Nottingham Way South, Clifton Park, New York 12065, that he is the
Treasurer of ENVIRONMENT-ONE CORPORATION, the corporation described in and which
executed the above  instrument;  and that he signed his name thereto by order of
the Board of Directors of said corporation.

                                                              /s/ Carol J. Hicks
                                                              ------------------
                                                              Notary Public

                                                        CAROL J. HICKS          
                                               Notary Public, State of New York 
                                                         No. 5022470            
                                               Qualified in Schenectady County  
                                             Commission Expires January 10, 1996

<PAGE>

STATE OF NEW YORK   )
                    ) ss.:
COUNTY OF Albany    )

         On this 16th day of Ocotber,  1995, before me personally appeared Kevin
P. Harrigan, to me known, who being by me duly sworn, did depose and say that he
resides  at 201  Autumn  Run,  Schenectady,  New York  12309,  that he is a Vice
President of FLEET BANK,  the  corporation  described in and which  executed the
above  instrument;  and that he signed his name thereto by order of the Board of
Directors of said corporation.

                                                         /s/ Oriana J. Farella
                                                         -----------------------
                                                         Notary Public

                                                      ORIANA J. FARELLA
                                               Notary Public, State of New York 
                                               Qualified in Schenectady County  
                                               Commission Expires April 3, 1997